Consumer Price Indices for March 2015

Consumer Price Indices for March 2015*************************************

The Census and Statistics Department (C&SD) released today (April 21) theConsumer Price Index (CPI)figures for March 2015. According to theComposite CPI, overall consumer prices rose by 4.5% in March 2015 over the same month a year earlier, larger than the average rate of increase in January and February 2015 (4.3%). The comparison to the average rate of increase in January and February is to neutralise the effect caused by different timing of the Lunar New Year between two years. Netting out the effects of all Government's one-off relief measures, the year-on-year rate of increase in theComposite CPI(i.e. the underlying inflation rate) in March 2015 was 2.8%, also larger than the average rate of increase in January and February 2015 (2.6%), mainly due to the smaller decreases in the charges for package tours.

The year-on-year rate of increase in theComposite CPIin March 2015 was 4.5%, slightly smaller than February 2015 (4.6%). Netting out the effects of all Government's one-off relief measures, the year-on-year rate of increase in theComposite CPIin March 2015 was 2.8%, the same as that in February 2015. Nonetheless, the February inflation figure was affected by the difference in timing of the Lunar New Year, which occurred in mid-February this year but late January and early February last year.

On a seasonally adjusted basis, the average monthly rate of increase in theComposite CPIfor the 3-month period from January to March 2015 was 0.2%, and that for the 3-month period from December 2014 to February 2015 was 0.1%. Netting out the effects of all Government's one-off relief measures, the average monthly rate of increase in theComposite CPIfor the 3-month period from January to March 2015 was 0.2%, and that for the 3-month period from December 2014 to February 2015 was 0.1%.

Analysed by sub-index, the year-on-year rates of increase in theCPI(A),CPI(B)andCPI(C)were 6.6%, 4.1% and 2.8% respectively in March 2015, which compared to the average rates of increase of 6.4%, 3.9% and 2.6% respectively in January and February 2015, and 6.5%, 4.2% and 3.0% respectively in February 2015. Netting out the effects of all Government's one-off relief measures, the year-on-year rates of increase in theCPI(A),CPI(B)andCPI(C)were 3.6%, 2.6% and 1.9% respectively in March 2015, which compared to the average rates of increase of 3.4%, 2.4% and 1.7% respectively in January and February 2015, and 3.5%, 2.7% and 2.2% respectively in February 2015.

On a seasonally adjusted basis, for the 3-month period from January to March 2015, the average monthly rates of change in the seasonally adjustedCPI(A),CPI(B)andCPI(C)were 0.2%, 0.1% and 0.1% respectively. The corresponding rates of change for the 3-month period from December 2014 to February 2015 were 0.1%, 0.1% and virtually nil. Netting out the effects of all Government's one-off relief measures, the corresponding average monthly rates of change in the seasonally adjustedCPI(A),CPI(B)andCPI(C)for the 3-month period from January to March 2015 were 0.2%, 0.1% and 0.1% respectively, and the corresponding rates of change for the 3-month period from December 2014 to February 2015 were 0.1%, 0.1% and virtually nil respectively.

Amongst the variousCPIcomponents, year-on-year increases in prices were recorded in March 2015 for electricity, gas and water (21.0% in theComposite CPIand 25.8% in theCPI(A), mainly because some households had used up the full amount of Government's one-off electricity charge subsidy); housing (8.1% in theComposite CPIand 11.4% in theCPI(A), due mainly to dissipation of effect of rates concession since October 2014); meals bought away from home (4.5% in the CompositeCPIand 4.4% in theCPI(A)); food (excluding meals bought away from home) (3.9% in the CompositeCPIand 4.0% in theCPI(A)); miscellaneous services (1.3% in the Composite CPI and 1.8% in the CPI(A)); miscellaneous goods (1.1% in the Composite CPI and 1.4% in the CPI(A)) as well as clothing and footwear (0.3% in the Composite CPI and 0.8% in the CPI(A)).

On the other hand, year-on-year decreases in prices were recorded in March 2015 for durable goods (-5.5% in theComposite CPIand -5.4% in theCPI(A)) as well as alcoholic drinks and tobacco (-0.2% in theComposite CPIand -0.1% in theCPI(A)).

As for transport, theComposite CPIfell by 0.1% over a year earlier but theCPI(A)rose by 1.7%.

In the first quarter of 2015, theComposite CPIrose by 4.4% over a year earlier, while theCPI(A),CPI(B)andCPI(C)rose by 6.5%, 3.9% and 2.6% respectively. The corresponding increases after netting out the effects of all Government's one-off relief measures were 2.7%, 3.5%, 2.5% and 1.8% respectively.

For the 12 months ended March 2015, theComposite CPIwas on average 4.5% higher than in the preceding 12-month period. The respective increases in theCPI(A),CPI(B)andCPI(C)were 6.1%, 4.1% and 3.2%. The corresponding increases after netting out the effects of all Government's one-off relief measures were 3.2%, 3.7%, 3.1% and 2.6% respectively.

Commentary

A Government spokesman said that inflationary pressure remained contained in recent months, with the year-on-year rate of change in underlyingComposite CPIreceding from 3.3% in the fourth quarter of 2014 to 2.7% in the first quarter of 2015, thanks to the abating imported inflation and moderate domestic cost pressures.

The spokesman commented further that, looking ahead, upside risks to inflation should remain limited in the near term given the low global inflation and modest growth pace of the local economy. The Government will continue to monitor the inflation developments closely, particularly its impact on the lower-income people.

Further information

The CPIs and year-on-year rates of change at section level for March 2015 are shown in Table 1. The time series on the year-on-year rates of change in the CPIs before and after removing the effects of one-off measures are shown in Table 2. For discerning the latest trend in consumer prices, it is also useful to look at the changes in the seasonally adjusted CPIs. The corresponding time series on the average monthly rates of change during the latest 3 months for the seasonally adjusted CPIs are shown in Table 3. The rates of change in the original and the seasonally adjustedComposite CPIand the underlying inflation rate are presented graphically in Chart 1.